CONFIDENTIAL
3. The agreement is the outcome of two years of complicated
and often difficult negotiations. The Government entered
into these negotiations with the Chinese Government in 1982 against the background of the historical realities which
determine Hong Kong's position today. In 1997 the lease on
the New Territories will run out: under that lease, unless
other arrangements were made 92 per cent of Hong Kong's land area would revert to China. The ceded territories, making up
the remaining 8 per cent, could not survive as an entity in
their own right. They have over the years been completely
integrated with the rest of Hong Kong. In these
circumstances there was
no real choice for the Government.
To do nothing, which would in practice have meant the
reversion of the territory to China in 1997 without agreed
arrangements, was not really an option. The uncertainty in
the meantime would have destroyed Hong Kong. It was clear
that we had to seek, by negotiation with China, arrangements
which would permit the maintenance after 1997 of Hong Kong's stability and prosperity, and to seek to enshrine these arrangements in a formal agreement with China.
CONFIDENTIAL